San Diego Real Estate Market Outlook For 2010 – Market Prediction and Whats in Store For Next Year

What a year to be in real estate! I think I am one of the last Realtors left! The last 18 months have seen an exodus of real estate agents from the business, and the ones who remain are truly the ones you want to be working with. This is a professional’s market, and now more than ever, you need a great Realtor to help you with your real estate needs. But what is in store for real estate in 2010?

Next year, we can expect somewhat of a roller-coaster ride for real estate, in general. We have a lot of good and a lot of not-so-good on the periphery, so how can you manage yourself and your home and investments as good as possible? Or will 2010 finally be the year that you jump into the real estate market for good? Let’s look at the good and the bad, and discuss both relative to each market segment out there (buyers, sellers, investors, etc).

First, the bad:

2010 will feature more of the same from bank foreclosures and short sales. In their most recent statistics, according to NAR about 25% of all transactions in America right now are distressed properties. Obviously things are different here in San Diego, where that number feels like 100%, but really is closer to about 2/3 of all sales, and it changes from area to area throughout the county. Because of a lack of cohesion and cooperation on the part of the banks and also on the part of government regulation, getting anything done with a bank in 2009 was (and is) pretty darn difficult. True, systems are in place and getting further refined, and more people are getting employed to take on the workload at the banks to get used to dealing with so many short sales, however, this has been a work in progress for the past 3 years and will continue to be so for 2010 and beyond.

In fact, there were a record number of Notice of Defaults (NOD’s) posted this last month, and with loan modifications becoming less and less apparent (meaning the banks just aren’t doing very many at all of these) expect there to be a consistent flow of more and more short sales and foreclosures. Furthermore, there are several ALT-A loans (what people have been calling the next wave of bad loans) where the borrowers of these types of loans will see their loan readjust to an unaffordable amount, causing further increasing pressure on defaults and foreclosures. More than anything, doing a short sale has in my opinion become an acceptable social construction. Doing a short sale is now commonplace and not as stigmatized as is has been for the past few years; the same goes for foreclosure as well. A vast amount people have gotten involved in a bad loan or a bad investment that there is no hesitation anymore in holding on to the home.

The trend now is to stop making payments and live in the property as long as possible then dump the property, and deal with the aftermath accordingly. Perception has shifted and I predict a heavy increase of short sales for 2010. I only hope that the banks are ready for it. Moreover, the IRS has an exemption on the tax you would typically pay on any forgiven debt for your primary residence. This is one of the main reasons folks have decided to do a short sale in the first place (among other benefits). This exemption is set to expire at the end of 2010, and this will be a cause for many homeowners who were just thinking about doing a short sale to get them to take action. You will want to consult a professional to get some real answers when it comes to a short sale, and you can contact me if you need that kind of help today.

Foreclosures as well as short sales will continue to be a big part of the available inventory throughout 2010, and I do not see them going away anytime soon. Expect this trend of massive distress sale (short sale and foreclosure) inventory to last well into 2012 or 2013.

Regarding the luxury real estate market and commercial real estate market; both of whom have struggled in 2009, they will continue to do so in 2010. I feel that the effect from the economic and market downturn will become even more pronounced for both of these market segments well into 2011 and on. For high end homes, perceptions are changing people are beginning to live more within their means. This recession has taught many a lesson on the excesses that had become commonplace over the past decade. Also, due to lending guideline changes, buyers who could normally afford an expensive loan can no longer qualify for it. More than anything, most people in this price point just aren’t ready to take the risk, or have lost their money and means to do so. As a result, the lack of sales in high end areas of San Diego reflects these trends. I am seeing that people with money are taking advantage of more lucrative deals at the lesser price points, and everything above a million still has yet to see the bottom. To cap it off, lending at this price point has just begun to turnaround; for most of this year it has been difficult to get financing for high end homes, even with a 50% down payments! Conclusively, I would not recommend entering the real estate market at any price point over $1 Million in 2010, unless you found one of those great deals that everyone is talking about (but very few actually find). Ultimately, I think there is just too much downside and risk here and not enough reward.

For commercial real estate, we have yet to see the bottom as well. For one, the economic downturn has caused many businesses to close up shop, which increases vacancies and decreases the money realized by the commercial property owner. This also causes property values to decline as commercial property is valued based on the income it generates. There will continue to be a lull in this regard for most commercial real estate until the economy begins to rebound and jobs are created in mass. Secondly, many property owners have refinanced their commercial real estate loans in the past few years, and these loans are going to be called due, which is especially problematic for those properties worth less now than what is owed to the bank. As such, we will see more and more commercial property being foreclosed and sold via a short sale (which simply has not been happening anywhere near the levels of residential real estate). I personally haven’t seen a significant enough decline in most commercial property values to call a bottom in 2010. This trend will continue for the next few years as commercial real estate tends to lag residential, generally speaking. I believe we are seeing only the beginning of what is to come. That said, I feel there is immense opportunity in this regard. I am beginning to see great income property that was not realistically priced prior, but is now selling at price points where the owner can cash flow with a modest amount down. I would keep my watchful eye on this market segment.

Importantly, the economy itself will also play a major role in both the local and national real estate recovery. We have seen how real estate got us into this mess, and it will also be one of the first industries to get us out. Although we have begun to see many signs of improvement, we aren’t out of the woods just yet. The issue at hand now is focused on job creation. Upon economic recovery, the creation of jobs will allow for substantial growth and appreciation in real estate.

The good:

2009 was the year where (most of) the market bottomed out. For any median priced property or lower, we saw the bottom of the market reached in early spring of this year. Since then, we have been experiencing a lack of inventory which has increased demand and caused price stability, and in certain areas, price appreciation. What I can buy in Chula Vista, El Cajon, or North Park today costs more than it did earlier this year. Again, we are seeing that perception shift and the mentality of buying a home has changed. As a result, the buyers are out in droves. Multiple offers are a normalcy and it is challenging for an active buyer because of the competition in the marketplace. Furthermore, interest rates are seriously phenomenal and I wouldn’t expect them to be this low for that much longer.

All that money that’s being printed and the debt that the US is taking on is going to have a serious impact on inflation. This increase of inflation will indeed increase interest rates (the reason being is that inflation means the dollar is worth less. If the dollar becomes worth less, the interest rate on a home mortgage needs to increase to take into account the loss of value that the dollar has incurred – this is simply cause and effect). I am sure the fed will try to hold this off as long as possible, but if you are in the market to buy a home, why not do it now? Prices are fresh off their bottom and with rates like these, one would look back in the future and say “why the heck did I not do anything when I had the chance!! Now everyone is rich and I am still renting a studio in Claremont!”

To make things even sweeter, the Government extended the first time home buyer credit to mid 2010, and also included a credit for move-up buyers to help stimulate this other important aspect of the market. (For more on this, call me)

On a separate note, people have come up to me on numerous occasions throughout the year talking about a shadow inventory of REO/Foreclosure/Repossessed homes that the banks are holding on to. These people say this because they are going to wait until the banks dump all that inventory on the market with the intention of then buying a property to get a smokin’ deal. To those people I will say this: ITS NOT GONNA HAPPEN. Banks are conducting a “controlled asset release”. They are slowly going to be releasing their large supply of foreclosed homes on the market little by little over a long span of time. This is a GREAT thing because it preserves value and keeps the prices from dropping anymore. This makes all current homeowners happier and more confident in general. It is absolutely necessary in this market, and it is one of the few things that the banks are doing RIGHT, in my opinion. This strategy is the one reason why you should get comfortable with foreclosures. There are so many of them (and they keep coming) that it will take a long time to absorb and sell off all of these non performing assets. As such, I see foreclosures as a large part of the total amount of transactions continuing for at least the next 18-24 months.

Moreover, earlier I spoke of the ALT-A loans that will be coming due and re-setting. Many people believe that this round of mortgage resets in the next few years are going to be much worse than before. It is important to note that the size and scale of these loans are not as large (or bad) as the sub-prime loans that began the mortgage meltdown mess. Yes, they are a problem, but as many experts in the industry have been saying, the worst is behind us and the issue now is how to pick up the pieces and make this picture whole again.

Lastly, from the beginning of 2008 we saw nearly all real estate development seize in all parts of the country. The population has not stopped growing, but the development of new homes has for the past 2 years been flat-lining. Expect to see the home builders and developers begin to get back on their feet now that prices have begun to hit their support. The fact that there has been no new building is a testament to the overbuilding that had occurred in the years prior to 2008, and since then the remainder has either been sold off on the cheap or absorbed organically. Regardless, new development is going to be needed sooner rather than later to catch up with demand, but this lack of building has also been one of the other reasons for price support in the market generally speaking.

So what to do now?

So for investors, proceed with caution. The best deals are the ones at the bottom part of the market (under $250,000), or the larger commercial developments where the principal investor/developer ran out of money. I won’t divulge my best sources in this newsletter, but call me for the most lucrative deal sources and property lists for San Diego.

For Sellers, 2010 will actually be a great time to sell. Inventory is down to a 2 month supply currently in most parts of San Diego, meaning that it is a seller’s market. As such, most places are beginning to see an increase in value. Buyers are eager to find and buy good property, and there is a lot of competition out there, so your property will get a lot of action (assuming it is below $700,000) – anything higher is more and more challenging as you increase in purchase price – so if you are one of those homeowners thinking of selling a high priced home – get out now while you still can.

For buyers: 2010 will be a year of ups and downs, but for the most part, there really hasn’t been an opportunity like this for quite some time. We are going to see some record months and then some real dead months depending on market swings (heavily tied to the financing of loans). Getting a loan through will continue to be difficult, but not as bad as it has been in 2009. Affordability is at a 30 year high, and the interest rates are at near-historic lows. As more and more people realize the opportunity at hand, more buyers will enter the market which will help to further stabilize the market and increase purchase prices. I predict a low, single digit appreciation for most zip codes across the board for San Diego in 2010. It is a phenomenal time to consider making your first purchase, or selling your home to move up to a bigger home for your growing family. I am actually finishing up a book specifically geared towards first time home buyers which will help guide you throughout each step of the process. My book is going to be available in the 1st quarter of 2010, available on Amazon.com, and will be a great help for anyone looking to buy their first home. For more information on this, call or email me anytime.

All in all, 2010 will be a weird year in real estate. I don’t see an overarching trend to work off of because all market segments are correcting at differing timescales and with different intensities. Further, the government and banks are continuing to tinker with processes that attempt to increase efficiencies with short sales, foreclosures, and loan modifications, and the results will be mixed. I am positive there will be some unexpected surprises and anomalies, but the bottom line is this: if you need help in real estate, use a professional and give us a call anytime. We are here to help you realize success.

May you experience health, wealth and joy in 2010. We look forward to hearing from you and happy to help you or any of your friends who need solid professional service, advice or assistance. If you know of someone who can benefit from our level of service, send us their information and we will follow up and take great care of them.

Michael Wolf is a GRI and Realtor in San Diego. His company is Ascent Real Estate, and his business partner and fiancée Jessica Richter are located in Bankers Hill. Michael and Jessica specialize in San Diego county real estate, with emphasis in Foreclosure and Short Sale distressed property. Aside from residential purchases and sales, Michael and Jessica have helped several investors with multi-unit and commercial residential income investment properties. Their team represents a passion for service and follow up that cannot be out done. For any of your real estate needs, contact either Mike of Jessica today: http://www.mikeandjessica.net | 858-722-6847 | wolf@ascentrealestate.net – Mike 858-722-3441 | jrichter@ascentrealestate.net – Jessica

Michael Wolf is a Realtor, GRI and author and currently practices in the San Diego area. His company is Ascent Real Estate, and his business partner and fiancée Jessica Richter are located in Bankers Hill. Michael and Jessica specialize in San Diego county real estate, with emphasis in Foreclosure and Short Sale distressed property. Aside from residential purchases and sales, Michael and Jessica have helped several investors with multi-unit and commercial residential income investment properties. Their team represents a passion for service and follow up that cannot be out done. contact him at: wolf@ascentrealestate.net.

Article Source: http://EzineArticles.com/expert/Michael_Justin_Wolf/465003

 

How to Get Started in Real Estate Investing

Introduction

This article has been written to provide a novice person considering real estate investing some fundamental concepts to consider as you commit yourself to this area of interest. Like all new endeavors explored, it will be to your advantage to have some basic knowledge on the particular topic before you can truly appreciate if this is right for you.

What Are The Financial Benefits Of Investing In Real Estate?

There are various opportunities that will financially benefit you by investing in real estate. Based upon your current financial condition and future investment goals, there are many factors that must be considered when selecting both a business model as well as a specific project. The following section will provide an overview on the significant financial benefits that are achievable when you invest in real estate.

Property Appreciation

Although predicting future appreciation with great certainty is not feasible, by looking at specific economic indicators can assist the Real Estate Investor in understanding future trends with regards to property value and possible appreciation. Some of these key indicators are as follows:

Job growth

Job growth is a key contributor in establishing possible future appreciation. As Primary jobs (those jobs that export products outside of the local area like the car makers of Detroit) increase, the need for Secondary jobs will also increase by 2-3 times the number of Primary jobs. Secondary jobs provide services to the people performing the Primary jobs. Examples of secondary jobs include the following:

Restaurant workers

Retail store workers

Local trades (plumbers, electricians, builders, etc.)

School employees

Demographic Trends

Demographic trends are another factor to consider when trying to determine if an area has the potential for future appreciation. Demographic research will provide data on the general population of an area which includes the following:

Population Changes

Age distribution

Income

Family Size

Race

Owners verses renters

Marital status

Revitalization Initiatives

Another factor that can affect the appreciation of an area is any revitalization initiatives the local government is undertaking. Revitalization can include the following:

Improvements of roads and transportation

Condemning and removing abandoned houses and buildings

Crime reduction

Tax credit, grants, and loans to developers and Investors to come into the area as well as programs to help keep the current employers from moving away.

Economic development offices from the local government are typically responsible for implementing and managing the revitalization efforts.

Cash flow

Another aspect of how to financially benefit from real estate investing is through the creation of cash flow. Although there are many factors that are taken into consideration that derives your cash flow, simply put, it is the amount of money left over for you after all of the expenses have been paid.

The term cash flow is usually associated with properties that you are holding and generating income from rental units or homes. The great thing about creating a cash flow stream is that it will typically continue whether you stay in bed all day or off on a vacation. However, sustaining this cash flow will take some effort on your part and may include the following:

Maintaining the property

Managing the existing tenants

Keeping the property occupied

Managing property management companies

Equity

Property equity is the difference between the fair market value of the property and the sum of all of the loans against the property. For example, if a property is worth $250,000 and there is a first and second mortgage totaling $200,000, the property has $50,000 in equity. Having equity in your property is essential in order to have a cushion in the event the market exhibits declining value during the time you are holding the property. By utilizing strategies like a refinance or Line of Credit, it will allow you to pull this equity out of the property and use it as you see fit including a return of your initial investment or to leverage this capital to purchase another property. Although having strong cash flow with your properties is vital during your hold times, this income stream will disappear if you ever need to sell the property. Ultimately, it is the equity in your properties that will help set the stage for your long-term wealth creation and financial security.

Tax Incentives

In addition to the benefits mentioned above, there are outstanding tax incentives that the real estate investor can benefit from, they include the following:

Depreciation of the actual property and any capital equipment that may be utilized in your business.

Deductions resulting from expenses from owning and managing the property the property as well as business expenses you may incur.

IRC 1031 exchanges, this is a powerful tax strategy that will allow you to leverage Capital Gains taxes that you would normally pay on the sale of an investment property and defer paying those taxes by purchasing a “Like-kind” replacement property with the full proceeds you received from the sale.

Why Do You Want To Invest In Real Estate?

It will be important for you to understand what reason(s) have motivated you to be interested and involved with real estate investing. Over the years, I have spoken to many new Investors on this subject and I have boiled it down to the following reasons:

Supplement Your Current Income

There are some people who are looking at just supplementing their current income without the intention of leaving their current profession and look at real estate investing as their second job. The Investor’s that fall into this group are fortunate because they are not relying solely on real estate investing as their primary source of income, this will be very beneficial during the time you are developing you real estate skill set and investment portfolio.

Take Control of Your Financial Future

Based upon the many years of speaking with Real Estate Investors, perhaps the most compelling reasons people consider real estate investing is the ability for you to have a significant influence of your financial security and for you to control the level of income you would like to receive.

Create a Retirement Plan for Yourself

Using real estate investing as a vehicle to establish or augment a retirement plan is another common motivator I hear frequently from new investors. It is understandable that when economic conditions include downsizing, cost of living increases, and the fear of Social Security meltdown, people are concerned about having an adequate financial foundation to sustain them during their retirement phase of life.

Critical Things to Consider Before Considering Real Estate Investing

Investing in real estate is certainly not for everyone and it will be important for you to honestly assess if this is the right path for you. The following section will provide some basic questions you should ask yourself as you evaluate the feasibility of becoming involved as a Real Estate Investor.

How Much Time Will You Have To Dedicate Towards Real Estate Investing?

As we all know, you can’t create anymore time; there can only be 24 hours in a day. As you consider real estate investing, you will need to be realistic with regards to how much time you will have to devote to this endeavor. With today’s fast paced society that requires multiple income sources combined with the commitments you may already have with your family, many people can be left with little or no time to devote towards their real estate investing goals.

Are You Able To Motivate Yourself And Have The Discipline Required To Succeed?

Having the desire to be a successful Real Estate Investor is only part of the equation for ultimate success. Along with the desire to succeed comes the need for you to be able to motivate and discipline yourself. Real estate investing is certainly not for everyone despite the late

Carl Schiovone has been actively involved in real estate investing for nearly 30 years. As the co-founder of Cypress Investment Properties, he specializes in the acquisition, rehabilitation, and property management of residential properties. Carl has lectured on various investment topics to numerous investment organizations and is currently working on publishing a series of real estate investment textbooks.

Carl is also the founder and President of Carl Schiovone and Associates Real Estate Coaching, Inc. This organization provides both group and one-on-one educational programs for all levels of investing experience. Please visit our website to learn about our outstanding complimentary coaching offer where we can discuss any real estate topic you like! http://CarlSchiovone.com

Article Source: http://EzineArticles.com/expert/Carl_Schiovone/487180

 

Real Estate Auctions (How Do They Work)

The popularity of auction sales of real estates is increasing day by day despite the dominance of the traditional process of real estate selling. Earlier these auctions were labelled as dishonour sales done by the distressed sellers when there was no other way to liquidate a property. But this view has changed as the number of real estate auctions are increasing day by day because sellers of residential as well as commercial properties are opting to auction their property directly or turning to real estate broker houses to get top price as per market rates from the auctions.

Auction opportunity arises when a seller’s mind is auction oriented with a hope that the property will fetch a fair market price. To get a fair price, his equity position in the auctioned property should be strong. With a strong equity position in the property, he will save the cost of paying a sales commission. The time of auctioning should be perfect, when the market is soaring high. The auctioneer should also try to avoid bearing high carrying costs associated with the property.

A profitable auction opportunity is created when there is limited supply of a particular type of property whose demand in the real estate market is relatively high or the market is declining with limited buyer’s interest in this traditional sales process.

When a property is offered for auctioned, a sense of urgency arises to bring the interested parties together on a particular day and the sales process creates a sales price through competitive bidding among the participating parties.

In early days of real estate auctions only the properties in bad conditions or subjected to foreclosure were auctioned. But now sellers are shifting to real estate auctions to sell their homes. This transformation has occurred because the earlier believe that a seller will not take the risk of auctioning his property at a lesser price than its market value has changed. Real estate auctioneers are at a liberty to set a minimum price which is more than its market value that he will receive in any case. In addition by setting a minimum price, he will no longer have to bear the risk of buying back the property if it does not reach that price and will also save the cost of paying the required sales commission to the auction house.

Many real estate owners prefer to go for a direct auction instead of going to a auction houses to avoid payment of sales commission to real estate brokers which is about 8-10 percent of the property’s value. Also the property owners have absolute control on the auction sales process. This is essential when a real estate takes lot of time to sell and the owner is represented by a real estate agent or broker. Many times, it is wise for a real estate owner to auction a property not in use to cut down maintenance expenses. Real estate auction is an exciting event both for the auctioneer and the bidding parties therefore they are always well attended.

Since auction is the best way to get true market value for the real estate, the magic of an exciting real estate auction works for the marketing of these properties for sale. Onus rests on the auctioneer to create demand or an urge to make a bid in the buyers/bidders mind and to attract the attention of the potential buyers/bidders. The potential buyers of the property are then registered after it is ensured that they are financially qualified. It is to be ensured that a considerable sum is paid by the buyer as a down payment which is non refundable and both parties are willing to close the deal as soon as possible. It is necessary to make sure before the auction that the buyer is financially secure so that the seller will not have to wait for receiving the entire payment. Many times it has been found that real estate auctions remain incomplete because the buyer or successful bidder is turned down for mortgages.

The following factors should be kept in mind before a real estate is auctioned by the property owner-

. He should consult experienced and professional auction consultant who have specialized in real estate auctioning.

. It should be ensured that the marketing campaign of the auction event focused properly to have a high impact.

. Importance should be given on direct mail marketing to targeted bidders/buyers.

. The auction event should be advertised in print and audio visual media to have a greater impact. If possible the consignment should be assigned to a reputed advertising agency to make the ad campaign more attractive.

. The auction event should also be advertised through internet and email.

After the promotion or advertisement campaign is launched, the auction event takes place within a few weeks on completion of official formalities. Sellers are informed about the auction date before hand after the auctioneer is ensured that the sellers/bidders are able to meet the preset terms and conditions laid down by him.

Following are the advantages of real estate auctions for the seller-

. The property owner is able to make a quick liquidation of their property.

. The auction is successful in creating a healthy competition among the bidders.

. Their property is exposed to a wide range of prospects.

. Closing is accelerated.

.The sellers are well aware about the date and time when the property will be sold.

. Auctions are successful in considerably bringing down the amount of time a property is on the market for sale.

. Auction gets rid of number of out of the blue events related to property sales.

. Auction reduces the burden of negotiation process from the sellers mind. He is able to sell the property according to the terms and conditions set by him.

. In contrast to conventional sales processes where it is mandatory for the property owner to make necessary improvements and renovations to get a fair price, these properties are auctioned on as-is-where-is basis. Potential buyers receive enough time to make a decision on whether to make a bid or not after having a good look at the property to be auctioned. Therefore it is sold with no emergency and the seller gains from it.

The buyer also enjoys innumerable advantages from real estate auctions, they are-

. He can set his own purchase price.

. He purchases the property at a fair market price.

. He does not have to make long negotiations or bargains to finalize a deal.

. Auction reduces the time to purchase a property.

. He will not have to worry about emergencies because purchasing and closing dates are known to him beforehand.

. Buyers are well aware that sellers are predetermined to sell.

For Free Report and more on Profiting from Real Estate Investing go to [http://www.wealthyideas.net].

Article Source: http://EzineArticles.com/expert/Frank_Berry/371045

 

Making Money in Real Estate

Making money in Real Estate is the most popular strategy to build wealth. If you’re not currently making money and building wealth in real estate you need to start. I have been making money using four very simple strategies that are very simple to duplicate.

All of the millionaires I have learned from make money and build wealth in real estate. That’s right, all of them! These real estate strategies can set you free for life!

If you learn and implement them you can build a massive amount of wealth in a very short period of time. I use a system for all four of the strategies that all go hand in hand.

These strategies can easily make you rich in a very short period of time. I use the first strategy to make money fast, the second strategy for making money in chunks and the third strategy is for building wealth and creating income for the rest of my life. The last strategy I use to buy real estate extremely cheap.

I use a step by step system for all of these money making systems. The first strategy requires in many cases no money and no credit. It’s the strategy I use to create anywhere from three to fifteen thousand dollars in profits per deal in a short period of time without ever even buying real estate. This strategy is known as wholesaling.

It’s easy to begin making quick money. You don’t need money to make money with this strategy! If you have bad credit don’t worry, you don’t need good credit to make money with this strategy. My goal is for you to have a check in your hands of $5,000 or more in 30 days or less!

I can show you my exact system on how to do it. Wholesale is nothing more than making an offer on a piece of real estate, getting that offer accepted, then simply assigning to contract to someone else. Don’t worry, making an offer on something doesn’t mean you’ll be forced to buy it”.

Making offers on Real Estate is easy! You can do it two ways. Through a realtor or directly to sellers who don’t have their homes listed with a realtor.

I developed a specific step by step system to find listed and unlisted properties to make offers on. Most of my deals are through listed properties. I use a realtor to make offers for me on properties that are listed.

There are a lot of realtors who won’t understand what you’re trying to accomplish. I’ll teach you exactly the process I use to find my realtors as well as how to get them on the same page as you with what you want to accomplish.

There are so many properties for sale. You need to learn how to find the best one’s to make offers on. Learning how to wholesale is the first step in becoming a real estate investor and getting out of the rat race! In all of my money making strategies I believe it is the easiest one for both beginners and advanced investors.

I use the second strategy to create larger chunks of cash anywhere from twenty to sixty thousand dollars in profits per deal. It takes a little longer to generate those profits than the first strategy but one deal generates much more money. This strategy is called retailing.

This strategy has some great advantages. It’s easy to make consistent $20,000+ on every deal, it can be done part time, and it can and should be done with someone else’s money!

Flipping real estate is nothing more than buying a house; fixing it up if it needs repairs, and then selling it for a profit. Most Real estate flippers that fail don’t understand the number 1 rule, Buy Cheap! When they buy a house most of them think they’re buying it cheap but chances are they’re not.

The biggest mistake investors make is they don’t calculate all of their costs before they do the deal. There is a specific formula that’s easy to follow that will make sure you follow this very important rule. The way you buy your real estate is the difference between winning and losing.

If you are new to real estate investing the first strategy you should implement is wholesaling. The reason is with wholesaling you learn how to make extra money without risking your own money. When you accomplish that then move to retailing.

After you learn how to earn extra money wholesaling, you will have accomplished your first step in becoming a successful flipper. That first step is learning how to buy cheap!

The third strategy I use to build wealth and get paid forever. By doing this I create a monthly income that will last forever. Making money in Real Estate is not just creating quick cash; it’s also about creating enough wealth where you can literally never have to work again! This strategy is known as buying and holding.

There are many ways to build a Money Making Machine. The best way is through real estate investing focused on building wealth. Making money now is important but creating wealth for the rest of your life is what will set you free!

Buying real estate isn’t hard, but, buying real estate correctly is where most people go wrong. Understanding what makes up a good deal is your greatest asset with this strategy.

You make money when you buy; you get paid when you sell. If you’re a beginner this will be the most important thing that must be understood. If you buy right you will have a lot of equity and great cash flow for the entire time you own a particular investment. This is what I refer to as building a money making machine.

In real estate there are many strategies to make money quick. Those are the strategies you should begin with because you have to learn how to buy cheap enough to make money.

After those strategies are executed that is the time to worry about building for the rest of your life. There are multiple ways to buy cheap it’s all about learning the ones that will work for you.

Now, once you know how to buy cheap creating wealth is easy! Simply make sure you have great cash flow with each deal you intend on doing and before you know it after multiple deals you will start building monthly cash flow.

Continue this simple recipe over and over and in a very short period of time you could be generating enough cash flow to live on then you can focus on getting rich and wealthy! Best of all you can focus on whatever you want because you don’t have to work if you don’t want to.

The reason this is my favorite real estate strategy is because I love residual income. Creating something once that pays you for the rest of your life is the smartest thing you can do financially. All my rich mentors made this lesson very clear to me.

Building a money making machine first starts with making quick money in real estate. Once you learn that you will know how to buy real estate the right way. From there all you have to do is hold it for cash flow for the rest of your life!

The final strategy I use to buy real estate extremely cheap from distressed sellers. Buying cheap through properties in pre-foreclosure is a tremendous opportunity.

There are so many ways to make money in real estate. Many people have a hard time finding which way fit’s them the best. Some people like to stick to one strategy, others like a lot of different strategies.

I recommend doing some research and reading some books to learn about all the different ways there are to make money before you choose one. I recommend the following products because they should help you decide what kind of real estate strategy you want to pursue.

Making money in real estate goes hand and hand with all of the other best money making strategies. The reason is the tax advantages you get blend very well together with all of the other money making strategies. Real estate investing is also one of my favorites because it is the best way to build ultimate wealth that will last forever!

Learning a simple money making strategy is easy. The hard part is where and who do you ask to teach you? This used to be my problem until I met some very successful mentors.

I learned for them many strategies to get rich, this one is one of the best. Making money in real estate is all about buying cheap! By finding and buying distressed real estate you will be able to buy extremely cheap.

Those who have a way to buy real estate extremely cheap will succeed. Pre-foreclosure investing is a great way to buy cheap from distressed sellers. It’s a win-win situation for you and the seller.

There are a few ways to buy real estate in distressed situations. If a seller is in pre-foreclose which means they are behind on payments but their home hasn’t been foreclosed on yet they would probably be very interested in selling.

Most of the time people end up losing their homes and would have been much better off if someone was there to help them out of that situation. Like I said, Win-Win situation.

There are two scenarios for the buyer. There is either already sufficient equity in the property for them to purchase it or there isn’t enough equity. Most of the time there won’t be enough.

There is a simple money making strategy know as short sales for properties that don’t have enough equity. In this case the bank or mortgage company that has a lien on the property will most likely accept a huge discount on what they are owed in exchange for a payoff of some amount for what they are owed.

For example, if a property is worth $200,000 and the bank has a lien of $180,000 for a property in not great shape they will probably accept a huge discount. The reason is the cost they have to incur to foreclose, list, and resell is huge.

You make them and offer at $100,000 as a payoff. After negotiations they accept $120,000. You’re now able to buy a $200,000 home for $120,000 through your knowledge.

All in all, these four Real Estate Investing Strategies all have their advantages and disadvantages. There is a sequential order they should be implemented in. Take this information and use it to the best of your ability and be smart and savvy out there.

My Name is Michael T. Keenan. I have been studying all aspect of finance for many years. I specialize in learning how to duplicate money making strategies that already exist which has allowed me to make a lot of money much quicker than normal. I have met hundreds of various millionaires and studied thousands. I used their strategies and techniques to get rich. I narrowed down all of the strategies used these millionaires to ten main strategies that I believed would be the easiest for me to duplicate and teach once I executed them. My studies have come a long way and it has allowed me to pursue two of my passions. I’m passionate about being wealthy and I’m even more passionate about teaching others how to get wealthy. After executing several of the ten strategies I began to write a website which allowed me to share my resources and knowledge with others. This was my first step in following my second passion which is educating others. I love adding new knowledge that I’ve required along the way to my website so everyone reading my site can benefit from that knowledge. I hope everyone interested in creating wealth and ultimately a better life for themselves and their families enjoys my articles and website. Visit my site below to learn more about the ten strategies I believe are the easiest money making strategies to duplicate in order to obtain massive wealth.

[http://www.bestmoneymakingstrategies.com/Making-Money-In-Real-Estate.html]

Article Source: http://EzineArticles.com/expert/Michael_T_Keenan/653497

 

Can TIC’s Survive in the Existing Real Estate Market?

TIC Investors

In this very dynamic real estate market TIC (Tenant in Common) investors have suffered as the market has weakened. In particular, those real estate investors that joined TIC investments in the last four years, (at the top of the market) are finding that in some locations, high vacancy rates and plunging rental rates are squeezing their cash flow and their ability to pay their mortgages.

Who bought TIC investments?

As baby boomers have aged, they wanted to reposition their assets into investments that did not take up as much of their time and that did not involve their day to day attention. These investors wanted to escape management intense investments and buy into real estate investments that guaranteed them a “safe and consistent” return.

They had typically sold other investments and traded into the TIC using a 1031 exchange, pooling with other investors which seemed like a safe bet. Unfortunately, many (not all*) TIC investments were organized by syndicators who purchased the properties at one price and then marked up the properties to resell to their investors. In many cases they used short term “interest only” loans to get their deals to pencil, betting that real estate appreciation as well as increasing rents would increase the value of the properties quickly and allow the properties to be refinanced.

As a result of the large number of investors (TIC syndicators, REITS and others) competing for the same inventory, the price of assets went sky high thus lowering the yields of the investments. CAP rates as low as five and a half were not unusual and CMBS loan originators and other financial institutions were willing to lend to TIC syndicators and their investors on a non recourse basis.

The Real Estate Market was not as strong as investors expected.

Market appreciation, and rent increases did not occur. In the majority of American markets most property vacancy rates have increased, making it difficult for TIC’s to have enough money to cover their expenses. In many cases the properties performed to proforma, but when the time came to refinance them the rules had changed and the lenders wanted to see more equity in each investment. Nervous lenders have moved their investor equity requirements from 25% to 40% and even 50%.

This has forced many TIC investors into the unpalatable position of significantly increasing their cash investments in properties to save their existing equity positions and furiously attempt to get new financing for their deals to replace the existing “interest only loans”. These new equity requirements are stretching the resources of TIC investors.

Today

In the past two years DBSI and Sunwest Management two major TIC syndicators have dissolved and filed for bankruptcy. As these cases move through the courts, questions have emerged about the future of TIC property sales. It seems likely that real estate TICs sold by real estate brokers will disappear and most likely be replaced by securitized TIC’s for larger investments and real estate partnerships for smaller investments. (TICs can be sold as real estate investments or as securities, but Real estate TICs are not held to the same high standard of disclosure as securities investments).

A reflection of this trend, is that the Tenant-In-Common Association (TICA) changed their name to Real Estate Investment Securities Association ( REISA). In the last year REISA recommended that all TICs be structured as securities.** Some TIC syndicators are still in business such as RealtyNet Advisors. Realtynet Advisors have adjusted to changes in the market place with their special approach to TIC’s where there is no debt just equity invested, in other words they do not borrow money to make a deal. They find enough investors to contribute equity for the full sales price.

The future of TIC investments will be dictated by the recovery of the market; in the mean time look for other ways to make money investing in real estate. Some of these other options include purchasing foreclosed property, purchasing real estate deals with large (50%) down payments or buying notes from banks that are desperate to increase their cash positions.

Notes:

**RealtyNet Advisors, are not your average Tenant-In-Common sponsor. Unlike most TIC sponsors, Realty Net Advisors don’t burden their properties with debt, brokerage fees, or other costly charges, and they do not sell at a higher than market rate. With the RealtyNet’s simple, co-ownership structure, investors own an undivided, fractional interest in an entire property. They each share in their portion of the net income, tax shelters, and property appreciation.” (quoted from RealtyNetAdvisors website) See http://www.realtynetadvisors.com/benefits-of-a-tic.php.

Note: What is a Tenant in Common (also known as Undivided Fractional Interest) Investment?

The tenant in common (or undivided fractional interest) structure allows investors to purchase an interest in a significant real estate asset, perhaps larger than they could obtain individually. The investor acquires a percentage ownership (title and deed) and receives passive rental income while receiving the tax benefits of traditional real estate. The investors own and control the properties, not a third party. TIC ownership provides investors with the first ever means for ownership diversity, both in location and type, of their real estate portfolio.

Unlike partnership real estate, TIC ownership entitles each owner to the same ownership rights regardless of the equity invested. This element of the investment structure puts no individual owner (or group of owners) in direct control of the property over any other investor(s). You can truly have all of the ownership benefits and security of a large commercial asset with significantly fewer obstacles. As with any type of investment, the value of a fractional interest typically increases annually due to escalations inherent in most tenant leases. From Real Estate Investment Securities Association website at, http://www.reisa.org.

** REISA is a national trade association for professionals who offer and distribute securitized real estate investments

Clifford A. Hockley is President of Bluestone & Hockley Real Estate Services, greater Portland’s full-service brokerage and property management company. Founded in 1972, Bluestone & Hockley’s staff totals nearly 110 employees, including 20 licensed brokers. The company’s property management division serves commercial buildings, apartments, condominium associations and houses in the Portland / Vancouver metro area, while the brokerage division facilitates both leasing and sales of investment properties throughout Oregon and Washington.

Cliff earned a degree in Political Science from Claremont McKenna College and holds an MBA from Willamette University. He is a Certified Property Manager and has achieved his Certified Commercial Investment Member designation (CCIM). Bluestone & Hockley is an Accredited Management Organization (AMO) by the Institute of Real Estate Management (IREM). Cliff is a member of the Institute of Real Estate Management and was named Certified Property Manager of the year in 2001 and 2003. Cliff is a frequent contributor to industry newsletters.

Bluestone & Hockley offers customized brokerage, property and asset management, as well as maintenance services. Property owners and investors throughout the Portland/Vancouver metro area. The company’s full-service approach benefits busy property owners and investors, who know they can count on Bluestone & Hockley for high quality real estate services start to finish. To learn more about Bluestone & Hockley, visit our about us visit http://www.bluestonehockley.com. To find out more about Cliff Hockley visit his contact page at http://www.bluestonehockley.com/sales-leasing/meet-our-brokers/cliff-hockley.

Article Source: http://EzineArticles.com/expert/Cliff_Hockley/629472